Singapore has five digital banking permits on offer, and by the Tuesday deadline three groups had said they were going after them. Ant Financial, the Chinese payments firm run by billionaire Jack Ma, is the third.
According to a statement from Ant, it applied to the Monetary Authority of Singapore for a wholesale licence. Such a licence allows a bank to serve corporate clients. The company said in an emailed statement that it looks forward “to contributing to the development of the digital banking landscape in Singapore.” Alibaba’s fintech arm was reported as an applicant by Bloomberg on Thursday.
How the permits are split
Two of the five are full digital bank licences. Holders can serve all kinds of customers, but need S$1.5 billion in capital and local control. The other three are wholesale licences. Foreign firms may hold majority stakes in those, and the capital commitment is S$100 million. Ant chose the second route.
Razer Inc. and Grab Holdings Inc. are both after full licences. Razer, the gaming company, has teamed up with Asian billionaires. Its application, announced on Wednesday, also names Singapore-based firms LinkSure Global, Carro and Insignia Ventures Partners in its consortium. Grab has partnered with Singapore Telecommunications.
The MAS announced the licences in June 2019, hoping to set technology and e-commerce companies against traditional banking giants. Its chairman, Tharman Shanmugaratnam, said then that they “will ensure that Singapore’s banking sector continues to be resilient, competitive and vibrant.”
The competition
If it wins, Ant will face DBS Group Holdings and OCBC in South-east Asia’s digital banking market. A report by Bain & Co, Google and Temasek puts the region’s digital lending market on course to more than quadruple, reaching US$110 billion by 2025.
Hong Kong moved first. Ant and Chinese rivals, Tencent Holdings among them, received licences there earlier in 2019. Bloomberg Intelligence counted about 900 million annual active users for Alipay and its local e-wallet partners in China and 1.2 billion worldwide as of June.
Alibaba shares closed 0.38% lower at $212.10 on Tuesday, and Razer’s closed 2.94% lower at $0.16 in the OTC market.
Sources
- Ant Financial applies for Singapore digital banking licence
- Alibaba's Ant Financial, Gaming Company Razer Apply For Singapore Digital Banking License
